Osteoporosis is a metabolic bone disease characterized by low bone mass and deterioration of bone microarchitecture. An understanding of the mechanisms by which bone formation is controlled is critical to understanding the pathogenesis of osteoporosis and defining molecular targets for development of new therapies for the treatment of this debilitating disease. Several lines of evidence show that BMP signaling plays a critical role in bone formation in vivo. A major mechanism by which BMPs stimulate osteoblast differentiation is by activation of the bone-specific transcription factor Cbfa1 through its downstream signaling molecules, Smad1 and 5. Recently we have discovered for the first time that inhibitors of the osteoblast proteasome stimulate bone formation in vivo and in vitro. We also identified for the first time that the E3 ubiquitin ligase Smurf1 mediates Cbfa1 degradation in an ubiquitin-proteasome-dependent manner. The detailed molecular mechanisms by which Smurf1 mediates Cbfa1 degradation and the regulatory role of Smurf1 in bone formation in vivo remain undefined. In the proposed studies, we will determine the mechanisms by which Smurf1 mediates Cbfa1 degradation and the role of Smurf1 in bone formation in vivo. The underlying hypothesis is that Smurf1 is an important regulatory molecule for Smad1 and Cbfa1 function and plays a critical role in regulation of bone formation in vivo. In Specific Aim 1, we will determine whether Smurf1-mediated Cbfa1 degradation is dependent on activation of BMP signaling, phosphorylation of Smad1 and formation of a Smad1/Cbfa1 protein complex. We will also determine whether PTH induces Cbfa1 degradation and the effects of Smurf1 on PTH-induced Cbfa1 degradation. In Specific Aim 2, we will determine the effects of over-expression of wild-type and mutant Smurf1 on bone formation in intact and ovariectomized animals and osteoblast function and protein levels of Smad1 and Cbfa1 in Smurf1 transgenic mice. We will also determine the effects of bone growth regulatory factors on bone formation in Smurf1 transgenic mice. To investigate the specific role of Smurf1 in bone formation during specific developmental stages, such as postnatal and adult life, we will also generate tissue-specific transgenic mice in which transgene expression is inducible. Our working hypotheses are that (1) Smurf1-mediated Cbfa1 degradation is dependent on activation of BMP signaling; (2) Modulation of osteoblast Smurf1 activity in vivo will result in abnormalities in bone formation that cannot be compensated for by other members of the E3 ubiquitin ligase family; and (3) Smurf1 regulates bone formation in both postnatal and adult life. The proposed studies will lead to a better understanding of the molecular mechanisms by which Smurf1 mediates Cbfa1 degradation and the physiological role of Smurf1 in bone formation in vivo. This study will also help identify a new molecular target for drug development for the treatment of osteoporosis and other bone-loss associated diseases.